Correlation Between Daya Materials and Eversafe Rubber
Can any of the company-specific risk be diversified away by investing in both Daya Materials and Eversafe Rubber at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Daya Materials and Eversafe Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daya Materials Bhd and Eversafe Rubber Bhd, you can compare the effects of market volatilities on Daya Materials and Eversafe Rubber and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Daya Materials with a short position of Eversafe Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daya Materials and Eversafe Rubber.
Diversification Opportunities for Daya Materials and Eversafe Rubber
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daya and Eversafe is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Daya Materials Bhd and Eversafe Rubber Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eversafe Rubber Bhd and Daya Materials is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Daya Materials Bhd are associated (or correlated) with Eversafe Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eversafe Rubber Bhd has no effect on the direction of Daya Materials i.e., Daya Materials and Eversafe Rubber go up and down completely randomly.
Pair Corralation between Daya Materials and Eversafe Rubber
Assuming the 90 days trading horizon Daya Materials Bhd is expected to generate 0.99 times more return on investment than Eversafe Rubber. However, Daya Materials Bhd is 1.01 times less risky than Eversafe Rubber. It trades about -0.08 of its potential returns per unit of risk. Eversafe Rubber Bhd is currently generating about -0.11 per unit of risk. If you would invest 12.00 in Daya Materials Bhd on August 30, 2024 and sell it today you would lose (1.00) from holding Daya Materials Bhd or give up 8.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Daya Materials Bhd vs. Eversafe Rubber Bhd
Performance |
| Timeline |
| Daya Materials Bhd |
| Eversafe Rubber Bhd |
Daya Materials and Eversafe Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daya Materials and Eversafe Rubber
The main advantage of trading using opposite Daya Materials and Eversafe Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daya Materials position performs unexpectedly, Eversafe Rubber can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Eversafe Rubber will offset losses from the drop in Eversafe Rubber's long position.| Daya Materials vs. Apex Healthcare Bhd | Daya Materials vs. IHH Healthcare Bhd | Daya Materials vs. Sapura Industrial Bhd | Daya Materials vs. DC HEALTHCARE HOLDINGS |
| Eversafe Rubber vs. Computer Forms Bhd | Eversafe Rubber vs. KPJ Healthcare Bhd | Eversafe Rubber vs. Press Metal Bhd | Eversafe Rubber vs. YX Precious Metals |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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